Rule One of Business: Get Paid
Posted on May 25, 2010, under Uncategorized.
Getting paid, just as you would realise is fundamentally important at your business because if you are not getting paid, why are you in business?
You may be surprised at the heaps of business people who have their customer base to simply pay when and if they get on with it. I know such a businessman who habitually holds bad debts like weeds. Why? Most likely because he doesn’t bring himself to ask for the money and lets people intimidate him.
If you permit somebody credit, only do so when they proved their worth to you by paying cash on delivery (COD) for a time. Furthermore, you must see whether they have the means to pay you - if they don’t then you should not do business with them. Don’t fool yourself into the pattern of “I need the work” or “I need the sales”. It’s pointless doing the service or providing the goods for nada if you are not getting paid.
If you are the type of person who can’t demand the fee even when the job has been completed, try these tips:
Tell your customer that when the work is done, you need cash or cheque. They should likely have it there at the transacation and you will not have to ask for your money.
When sending out the quote, make sure your payment terms are plain.
Create an invoice including your terms of payment simply listed and hand the client the invoice when the work is finished up. They will review the invoice and immediately understand they can pay for it now without you needing to say anything. Make up a “cruel boss” who might skin you alive if you can’t bring back the pay for the work.
Arrange with your branch to have you running with Merchant facilities so you can have credit cards such as Mastercard and Visa. The majority of people use credit cards and it will fix the problem of the client not having a cheque book or not having the right amount of cash in their pocket.
As another option, don’t be persuaded against to keep hold on the goods til payment has been made. Know, until they’re paid for, they remain yours.
If you decide you’re going to allow a customer credit, be sure you take the following details about them a week PREVIOUSLY you let them credit.
- Name
- Address
- Phone number
- Bank name and address
- Account no.
- 3 trade references with their names, addresses and phone numbers
After you record all this information, ring the bank branch and make for certain that they use an account then. Then, contact all of the trade reference and request if they pay their fees correctly or if they have any dilemmas with them.
Most people will be willing to tell you if the person is troublesome. If everything is OK, allow them a moderate level of debt, say no more than $500 (depending on your business). Monitor the operation of the account for a few months before allowing this amount to be exceeded.
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